The world’s largest elevator and escalator maker, US-based Otis, will sell its business in Russia, the company announced on Wednesday.
The firm said that “supply chain disruptions and mounting regulations” caused by the “ongoing crisis in Eastern Europe” mean that its business in Russia “is no longer sustainable”, and the company has reached an agreement “to sell 100% of its interest in the Otis Russia business”, reads the statement published on its website.
The company’s assets in Russia include an elevator equipment factory in Saint-Petersburg with annual capacity of up to 7000 lifts, and a wide service network.
According to Otis, the buyer is Ice Development, a Russian-based investment company that oversees large-scale residential construction, and the agreement is expected to close imminently. The sum has not been disclosed.
“Upon transfer of ownership, Ice Development expects to resume full production at the Otis St. Petersburg manufacturing site, under a new brand name.” Otis said.
According to a statement from Russia’s Ministry of Industry and Trade, cited by news agencies, the buyer is S8 Capital, a holding that launches and develops high-tech projects in various lines of business. Ice Development is in S8 Capital’s “sphere of interests”, according to business daily RBC, citing the ministry.
The factory in St. Petersburg is expected to resume production on August 1, Interfax quoted Minister of Trade and Industry Denis Manturov as saying.
Otis announced in March it would not take new orders in Russia and would suspend new investments in the country. According to a press release, operations in Russia by the end of 2021 accounted for about 2% of Otis's global revenue.
For more stories on economy & finance visit RT's business section